The Fraser Institute: Reducing Capital Gains Taxes Would Encourage Investment and Grow Canada''s Economy
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 11/06/14 -- With a federal budget surplus looming, a new released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank, spotlights three possible options for reducing capital gains taxes in Canada.
"As the debate about how to prioritize the budget surplus continues, evidence from around the world clearly shows that capital gains tax reform in Canada could provide considerable economic bang for the buck," said Jason Clemens, Fraser Institute executive vice-president and co-editor of .
Capital gains taxes are imposed on gains from the sale of assets. Canadians currently face the 14th highest capital gains tax rate among the 34 OECD countries. High taxes on capital discourage investment and entrepreneurship. Since Canada is a small economy competing for investment, it needs a competitive tax regime.
The book features a series of essays from internationally-recognized scholars, detailing the experiences of Hong Kong, New Zealand, Switzerland and the United States, and providing reform options for Canada, which include:
Capital gains rollover
Capital gains taxes cause investors to retain older investments even if more profitable and productive opportunities become available. Economists call this the "lock-in effect," which discourages investment in new business ventures.
The first reform option is the introduction of a "rollover mechanism" for capital gains, which some countries such as the United States have experimented with, as noted in an essay by Stephen J. Entin, former deputy assistant secretary at the U.S. Department of the Treasury. Rollovers allow for a tax deferral if the gains (on the sale of an asset) are reinvested within a certain timeframe, perhaps six months, thus mitigating the lock-in effect. In 2006, the Canadian federal government discussed such a change but it was never implemented.
Eliminate the capital gains tax
In Canada, capital gains tax revenue represents a mere 1.1 per cent of the federal government''s overall revenue, yet hurts the economy by discouraging investment and entrepreneurship. As a remedy, Canada could follow the lead of Switzerland, Hong Kong and New Zealand, which impose no capital gains taxes, and as a result, boost impressive savings and investment rates.
Hong Kong, for example, has a higher savings rate than most developed countries (including Canada) and has emerged as a major financial centre and location for regional corporate headquarters. Switzerland is also a popular investment destination for global investors and companies.
"Capital gains tax revenue comprises a small share of federal tax revenues, so eliminating the tax could liberate locked-in capital and provide a considerable boost to the Canadian economy at a small cost," said Charles Lammam, book co-editor and Fraser Institute associate director of tax and fiscal policy.
Lower the capital gains tax rate
Finally, to better compete with other countries and make Canada more attractive to investment, Canada could simply lower the capital gains tax rate.
"If Canada cuts the capital gains tax rate to be more competitive with other countries, it would draw new investment into the country," Clemens said.
"As Canada transitions from a federal budget deficit to a surplus, it can learn from other jurisdictions and reform capital gains taxes, laying the foundation for long-term economic growth for the benefit of all Canadians," Lammam said.
/
The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute''s independence, it does not accept grants from governments or contracts for research. Visit .
Contacts:
Media Contact - The Fraser Institute
Jason Clemens
Executive Vice-President
(604) 714-4591
Media Contact - The Fraser Institute
Charles Lammam
Associate Director of Tax and Fiscal Policy
(604) 714-4544
(at)CharlesLammam
The Fraser Institute
Mark Hasiuk
Media Relations Specialist
(604) 688-0221 ext. 517
(at)FraserInstitute
Themen in dieser Pressemitteilung:
Unternehmensinformation / Kurzprofil:
Datum: 06.11.2014 - 05:15 Uhr
Sprache: Deutsch
News-ID 1316060
Anzahl Zeichen: 0
contact information:
Contact person:
Town:
VANCOUVER, BRITISH COLUMBIA
Phone:
Kategorie:
Associations
Anmerkungen:
Diese Pressemitteilung wurde bisher 220 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"The Fraser Institute: Reducing Capital Gains Taxes Would Encourage Investment and Grow Canada''s Economy
"
steht unter der journalistisch-redaktionellen Verantwortung von
The Fraser Institute (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
